Even with few assets, divorce may hurt Marylanders’ wallets

In a high net worth divorce, Marylanders would probably expect that both parties would see a substantial change in their financial situations. After all, divorce means that a formerly married couple will divide their property and generally will walk away with roughly half of their overall wealth. When the couple has a lot of wealth between them, this means that each has a lot to lose.

However, as a Howard County divorce lawyer or another expert would point out, divorce can have a significant financial impact on a person with more modest assets as well. This impact may come about in a variety of ways one might not expect.

For example, once a person divorces, he or she may need to invest in long-term care insurance, as his or her husband or wife will not be around to provide for daily needs in a person’s old age. Furthermore, he or she will want to speak to a person who specializes in retirement planning. Once a couple divorces, each person will have less of a financial pot from which to draw at retirement.

People also need to be aware that effective in the tax year during which they file for divorce, they may no longer file income taxes as “married, filing jointly.” While not always the case, this can mean that a person will face a higher income tax bill going forward.

Finally, anybody who is divorcing must prepare to pay attorney fees, if he or she intends to hire a lawyer, which is usually a very smart idea even in what seems to be an uncontested divorce. While attorney fees in a divorce are inevitable, a Maryland resident should not be shy about talking to his or her lawyer about what he or she can afford. The lawyer may have some helpful suggestions for reducing the overall bill and for passing on some of the cost.

Source: Los Angeles Times, “Five ways divorce will impact your finances,” Stuart Pfiefer, March 28, 2013.